Saving for Your Child’s Education: What Are Your Options?

Equip your child for success with smart, goal-based savings.

State of the Game

Higher education costs in India range from ₹20–50 lakh—and even more abroad . A structured approach to saving ensures financial security when it matters most.

1. Sukanya Samriddhi Yojana (SSY)

• High interest (~8.2% p.a.), tax benefits

• Lock-in till girl child is 21, partially withdrawable after 18

2. Public Provident Fund (PPF)

• Long-term (15‑year) investment, interest ~7.1% p.a., tax-free (en.wikipedia.org)

• Partial withdrawal after 7 years, extended maturity allowed

3. ELSS (Equity-Linked Savings Scheme) via SIP

• Equity-based, 3‑year lock-in, tax-deductible under 80C

• Suitable for 10+ year horizons; compounding can boost returns

4. Child ULIPs and Insurance Plans

• Combine insurance + investment; maturity aligned with child's milestones

• Tax perks under Sections 80C/10(10D)

5. Recurring Deposits & Fixed Deposits

• Safe, predictable returns (5.5–7%); suitable for short-to-mid-term goals

6. Mutual Funds & ETFs via SIP

• Equity mutual funds offer growth; ETFs offer diversification

• Start small—₹500/month—build over time

7. Education Loans & Scholarships

• Loans ease burden; interest subsidies available

• Scholarships reduce out‑of‑pocket expenses

Comparison at a Glance

Option	Risk	Return	Lock-in	Tax Benefit
SSY	Low	~8%	Till 21 yrs	Yes
PPF	Low	~7%	15 yrs	Yes
ELSS	Medium-High	Equity returns	3 yrs	Yes
ULIP	Medium	Varies	Usually 5+ yrs	Yes
FD/RD	Low	5–7%	Short	No
Mutual SIP	Medium-High	Market linked	None	No
Edu Loan	n/a	Depends	Varies	Yes (interest)

Tips to Maximize Results

• Start early—the power of compounding is strongest over long horizons

• Diversify across debt and equity instruments

• Rebalance portfolio as child approaches college age

• Leverage tax benefits in old regime

• Consult a financial advisor if unsure

References

• GoDigit & EduFund

• IndiaFirstLife